It makes sense why people prefer to buy online than in person nowadays.
It's far easier to just Google exactly what you want, order it, and have it delivered to your doorstep within a matter of days.
So, it also makes sense why people want to start online stores to make up for this huge demand.
However, not everyone has the means to make an upfront, large investment in inventory. An inventory includes the merchandise, goods, items, and materials that the business sells to earn profit.
But, if you don't have the financial or physical resources to support an inventory, can you still sell online?
If you're new to the world of online business and want to know if you can start an online business without an inventory, you've come to the right place.
Here is how to sell online without inventory.
Can You Sell Online Without Inventory?
Let's take a look at if it's even possible to sell online without inventory.
Firstly, yes - you can sell online without inventory. This is great news for those who don't have the money or space for a large investment of inventory.
There are several ways to do so, with lots of options available depending on your business.
How To Sell Online Without Inventory
Dropshipping is one of the most common ways of selling online without inventory. This is where the owner of the store basically acts like the middleman between the vendor and customer.
The vendor virtually supplies goods through affiliates and resellers (dropshippers), which then send the items to the customers.
As a dropshipper, you will find the products, import them to your store, and then change the price and the description.
This way, you don't have to keep the inventory in your home or business office.
The vendor deals with the fulfillment and shipping of the order. For each sale, the dropshipper receives a commission.
This is a low-effort and low-risk way of running an online store without inventory. You just focus on the marketing and driving sales, rather than the product design itself.
All you have to do is promote the items you want to sell on your website, working alongside your chosen vendor.
However, there are some drawbacks to dropshipping. After all, dropshippers only receive a commission, and often the cost of returning inventory is high.
It also comes with the frustrations of dealing with third-party warehouses and trying to figure out missing orders or why orders are late.
As a customer, it's far easier to buy an item from someone directly, after all.
Find A Third-Party Warehouse
This online store model means that you use a third-party warehouse filled with a wide range of e-commerce needs. You will technically have an inventory, you just won't see it.
Nor will you store or ship it - everything is done by a third-party logistics partner.
This partner works kind of like the dropshipper, where they will buy and store items from retailers and suppliers, and then you do the rest online.
The warehouse will also deliver the goods to the customer. It's a little more complicated than dropshipping, because it means there are more parties involved.
Because you are outsourcing almost everything, the only thing you need to worry about is marketing your online store.
Another reason why this business model is so popular is that third-party logistic partners will offer access to real-time data for the retailer and reseller to track.
This communication is ideal and not available in dropshipping. The only downside is that working with a third-party warehouse can be costly.
So, this business model is only suitable for established stores that can afford this.
Also known as POD, print on demand is most suitable for online stores that offer printed white-label products.
This includes t-shirts, tote bags, caps, sweatshirts, and anything that can be made into wearable products.
This is great for merchandise online stores, in particular.
As the name suggests, the main benefit to this business model is that everything is printed on demand.
This means that you won't have to purchase bulk printing and end up with massive stock. So, if the clothing doesn't sell, you don't have to worry about wasting money or space.
Also, you don't have to do the printing yourself, which can be costly with professional equipment.
However, if you plan to print your own designs in the future, this gives you time to build your brand organically before you purchase your own equipment.
The only downside is that you won't be handling the product, similarly to dropshipping.
Your printing partner isn't always going to have the right availability to match your needs, either.
This business model is similar to dropshipping, wherein you don't have to source the products yourself.
However, you don't get to set your own prices when you're an affiliate store, unlike dropshipping. Your role is to sell for other sellers, working as a marketer for their products, and you get a commission in return.
This business model is super convenient and time-saving, allowing you to focus more on the marketing side of the business.
However, the main limitation is that you can't set the product price. You're not likely to receive a high commission in comparison to dropshipping.
Unless you're an excellent salesperson, you're not going to make big bucks with this method.
While pyramid schemes don't always get the best reputation, it's still a viable business model.
You receive passive income from the people you recruit as salespeople, and you can get free training and website building as a multi-level marketer.
However, being a part of an MLM is tough.
You'll be recruiting as well as trying to find customers, and considering how you'll likely be recruiting from those in your inner circle, this isn't the most moral business model.
So, there you have it! It is possible to run an online store and sell online without an inventory. Hopefully, this guide has led you to the right business model for you.
Connect with Aspiring Entrepreneurs: